THE jobs of hundreds of workers at Kvaerner's operations on Teesside would appear to have been safeguarded by a new rescue plan. Crisis talks at the weekend between senior managers, directors, investors, banks, lawyers and the Norwegian government, would seem to have saved the Anglo-Norwegian engineering firm from bankruptcy.

But the plans, involving a five-point rescue scheme from Russian oil firm Yukos, a 22 per cent shareholder in Kvaerner, may only have bought time for the group.

Yukos will give Kvaerner working capital for the next week, providing breathing space to complete the restructuring of its debts and finalise a new share scheme.

The Yukos working capital represents a partial payment for the oil company's £70m purchase of Kvaerner's London hydrocarbon and process technology businesses.

Yukos' plan also included a £103m restructuring fund from a consortium of backers, on the condition that banks restructure and forgive debt. However, Kvaerner, one of Norway's largest and oldest companies, has refused to say when talks with Yukos might be concluded. It is thought that a decision may not come before the end of today.

Kvaerner spokesman Paul Emberley said: "We are not dismissive of Yukos' offer, but we recognise the need for a strong platform for the future, not a short-term solution."

The engineering and construction concern, which has about 35,000 employees worldwide, including more than 7,000 in the UK, has gone from crisis to crisis in recent weeks, seeking long-term financing solutions to keep its operations running, despite debts.

Kvaerner shares were suspended from the Oslo and London stock exchanges yesterday, as talks with the group's main banks and key shareholders continued.

Kvaerner, with activities in 35 countries, expanded aggressively in the 1990s to become Europe's largest shipbuilder. It bought Britain's Trafalgar House in 1996.

However, it ran into trouble, with heavy losses in 1998 and 1999 and a plummeting share price that forced major restructuring, including the sale of many of its shipyards.

Kvaerner returned to profitability last year, but yesterday announced a net loss of £315m for the first nine months of this year.

The Norwegian-registered company plans to move most of its international management back to Oslo, after six years in London.

Yesterday, the group racked up a pre-tax loss of £336m in the three months to September 30. The firm said it had been forced to write off £276.1m, almost half of which was down to the lower value of its UK pension fund.

Kvaerner's shipyard in Philadelphia in the US also cost the company £29.2m after it scaled down forecasts for that business. The overall pre-tax loss of £336m compares with a profit of £12.4m a year earlier.

Despite the problems, order intake in the third quarter remained strong, particularly for oil and gas and the engineering division.